South Korea has removed a cap on commercial banks’ bond sales enacted during last year’s credit crunch, in a bid to ensure funding for the financial sector.
The Financial Services Commission told Bloomberg about the decision on Wednesday, when asked about a Korea Economic Daily report. The newspaper said authorities had scuppered the rule, which limited banks to issuing an amount of bonds equivalent to 125% of those maturing each quarter.
With Korea’s credit market seized up due to the default of a property developer, officials last year asked banks to refrain from selling bonds so as not to siphon off even more liquidity.
Read the full story on Bloomberg here.